Dusty Garza
NBA Commissioner Adam Silver has pointed to San Antonio and Victor Wembanyama as an example of the success of the league’s efforts to make every market, big or small, a competitive participant in the sport.
“There’s never been more competition. And we’re competing against every other form of media. I mean, putting aside the attraction arena business, there are truly unlimited options,” said Silver during a press conference following the league’s board of governors meeting on Tuesday. “So you’ve got to put your best foot forward all the time.”
Silver’s challenge in recent years has been to sit down with teams, various partners, and the players union in order to create a product that is not only competitive and sustainable economically but where participating teams have roughly equivalent levels of talent.
“In the so-called old days, there were certainly fewer teams that were competitive,” says Silver. “And they’re driving all your interest that you’re, almost by definition, you’re going to have fewer fans following you. Fans of those markets aren’t going to feel they’re in a position to compete.”
Under Silver’s leadership, the league is constantly changing and adapting new regulations to keep that competitive balance and improve its entertainment sports product vibrant and these regular meetings with the NBA’s board of governors help those efforts.
“I think there was a sense then that there were certain markets you needed to get to if you really wanted to be a big star because of the nature of the way media works. I don’t think that’s the case anymore,” explains Silver.
“I’ve made this case several times. Most recently, Victor Wembanyama went to San Antonio, which is, of course, relative to other markets in this league, a smaller market. I don’t think anybody’s out there saying there’s a ceiling on Victor Wembanyama’s popularity because he’s playing in San Antonio as opposed to a bigger market. I mean, certainly not for the French fans. We saw it in the Olympics. And I think he has the opportunity to be a huge global star.”
NBA Commissioner Adam Silver has just pointed to San Antonio and Victor Wembanyama as an example of the success of the league’s efforts to make every market, big or small, a competitive participant in the league. #NBA #PorVida pic.twitter.com/fboODU2nrS
— SpursRΞPORT (@SpursReporter) September 10, 2024
The NBA has implemented several complex rules to discourage the wealthiest owners from simply buying championships. The most stringent rule changes began to take place in the early 2000s. The luxury tax was introduced in the 1999 Collective Bargaining Agreement (CBA) and took effect in the 2002-03 season. This tax penalizes teams that exceed a certain payroll threshold, making it costly to maintain a high payroll with expensive “superstar” players.
Over the last decade, the Spurs have been under the NBA’s luxury tax threshold for nine out of ten seasons. The team has consistently managed its finances well, avoiding significant luxury tax penalties and maintaining flexibility in its roster construction, but perhaps more importantly, the team has been able to get more money from the league for doing so.
Not only do the NBA Teams under the luxury tax have more flexibility in terms of signing free agents and making trades without facing additional financial penalties, but the league also rewards those teams with big financial incentives. Up to 50% of the luxury tax collected from teams (like the Clippers, Warriors, and Suns) that exceed the threshold is distributed to teams like San Antonio that stay under it. This is designed to provide an incentive for teams to manage their payrolls responsibly.
Win or lose, since 2017, the Spurs have received $46.5 million from the NBA and paid $0 in Luxury Tax Fees. Their projected Luxury Tax fees for the upcoming season are $0 but like Silver said today, Wembanyama’s rise to stardom “will ultimately be determined by how successful he is as a player and how successful his team is, not by the market size.”
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